In commenting on Bob Iger’s defense of Disney's values and brand in the face of threats from Florida Governor DeSantis, Nike CEO John Donahoe said, “I think Bob’s doing a great job at this. If it’s core to who you are and your values, then you stand up for your values.”
That spirit has been rewarded by the free market. Across many fronts, we have shown in quantitative analysis of business performance that doing good for society is not at the expense of doing well for shareholders, with clear examples ranging from Russian business exits to public engagement on voting rights.
Yet still, grandstanding political ideologues are using opportunistic attacks on iconic U.S. enterprises to showcase their own nascent anti-ESG businesses, and reportedly build a “parallel economy” catering to conservative constituencies. But far from flourishing, an objective review of the facts suggests these anti-wokester jokesters are financially foundering.
One little-known index fund provider, the American Conservative Values ETF (ACVF), recently received a flurry of media attention for boycotting Target over what they described as its “pandering to the woke agenda,” confidently declaring that their boycott of Target will ensure “Target stock’s long-term performance will suffer.”
Target stock is down, but in reality, the fund’s total holdings of Target amount to just $100,000–equivalent to the revenue that Target nets every 20 seconds. In fact, ACVF’s total assets under management are a rather measly $40 million–and many of their other “boycotted” companies–including iconic All-American enterprises such as Apple, Microsoft, Delta Airlines, American Airlines, Disney, Walmart, Coca-Cola, Salesforce, and JPMorgan–have performed quite well since being targeted by ACVF. Delta is up 10% this year, American is up 15% this year, Microsoft and Apple are both up over 40% this year and Salesforce is up 60%. Thanks in part to missing out on these top-performing stocks, ACVF is underperforming the S&P 500 by over 2% this year through June 1. No wonder even politically conservative investors stay away from these anti-woke ETFs.
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ACVF’s struggles rather pale in comparison to those of its much larger and better-known rival, presidential candidate Vivek Ramaswamy’s Strive Asset Management. We have contacted both firms about our findings by phone and email, but their representatives directed us to figures published on their respective websites, which we checked–and double-checked.
The business models of both Strive and ACVF are similar: They construct exchange-traded funds, or ETFs, for mom-and-pop retail investors to passively track a basket of stocks, matching rather than trying to beat the broader market. Unlike hedge funds, these ETF providers do not care if the stocks go up, down, or sideways–rather, they get their money from fees charged on anyone who has their money in a Strive ETF. Most ETFs are very low-fee products–but the anti-woke ETFs come at a premium. BlackRock ETFs, for example, usually charge around 0.03% fees. Strive’s fees are comparatively higher at up to 0.41%–but nothing compared to ACVF’s 0.75% fee.
To survive over the long run, these nascent ETF providers need to continually attract new money from mom-and-pop investors. And that is exactly what it appears they are struggling to do. All the evidence, out in the open, shows that Strive has had a hard time attracting additional investor inflows beyond its original anchor investors after the launch of its ETFs last year. Its assets under management appear to have stagnated despite Ramaswamy’s loud media presence.
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For example, its largest flagship ETF, the Strive US Energy ETF (DRLL), has almost exactly the same amount of assets under management (AUM) as of June 1, $320 million, that it did when it was launched in August/September 2022, and its AUM is down nearly 25% from the start of this year.
Fully half of Strive’s eight current ETF products–including the Strive 1000 Growth ETF, the Strive 1000 Value ETF, the Strive 1000 Dividend Growth ETF, and the Strive Small-Cap ETF–have less than $12 million assets under management each, which is microscopic relative to the industry standard–and less than the average compensation of a single major CEO at most companies.
View this interactive chart on Fortune.com
Thus it is hardly surprising that some of the most admired CEOs are flippantly swatting away Strive’s attempts at “activism.” Ramaswamy has become the court jester of corporate governance. The mere mention of his name brings anything from smirks to outright gales of laughter amongst some corporate audiences.
One hopes that Strive is not on a path to fail as badly as some of Ramaswamy’s previous ventures, such as Axovant, a Ramaswamy-founded company whose stock price plunged from $200 to 40 cents, or Campus Venture Networks, Ramaswamy’s much-hyped undergraduate startup which, despite his self-aggrandizement, he apparently sold for just a few thousand dollars, if his tax returns are correct. Even one of Strive’s biggest financial backers, Bill Ackman, is apparently embarrassed and rushing to disavow Ramaswamy. Meanwhile, Strive is reduced to seeking “consulting contract” handouts from friendly politicos. Perhaps this helps explain why Ramaswamy is running his longshot Presidential campaign: Nothing turns around sagging business fortunes quite like a new burst of free publicity!
It is not only in high finance that these “parallel economy” startups are flailing. Attempts to build a new alt-right media ecosystem are similarly landing with a thud.
Perhaps most infamously, Donald Trump’s much-hyped Truth Social alt-platform has imploded in value, with its SPAC packaging (ticker DWAC) shares falling from $95 to $13 even as the former president flails away on this otherwise quiet platform. Alt-right social media rivals such as Gab and GabPay are struggling to gain traction, begging for donations through crowdsourced funding, while provocateur Alex Jones and his Infowars declared bankruptcy after a record $1 billion verdict for the Sandy Hook families. More prominently, One America News has now been dropped by every major cable operator, partially driven by low audiences, while its behemoth rival Fox’s struggles are just beginning after the record $787.5 million Dominion settlement–with its board reportedly becoming weary of deviating too far from the mainstream.
Efforts to expand the alt-right parallel economy across digital services and even physical goods are running straight into the ground as well. Virtually all major retailers from Bed Bath & Beyond to Walmart to Kohl’s to Costco have cut ties with Mike Lindell’s MyPillow, which just months ago closed its last in-person retail mall store while losing $100 million, according to Lindell himself. Former Trump personnel director Johnny McEntee’s project–an alt-right dating site, “The Right Stuff”–has been lambasted even by its core constituency, with its mostly men frustrated by the lack of women users, and its seed funding from Peter Thiel is reportedly scheduled to run out in the next few months.
To a hammer, everything looks like a nail; and the exertions of some anti-woke activists in extrapolating politicized rhetoric into the economy can stretch into caricature. Strangely, the struggles of the nation’s regional banks, such as SVB, Signature, and First Republic, were superstitiously blamed on “wokeism” and the facts–that these less diversified banks were unprepared for the Fed’s interest rate hikes and that larger, equally “woke” banks were better insulated from these interest rate swings–were ignored. This month, even the conservative New York Post was bewildered by the sudden ire this month of anti-wokesters targeting the privately owned, very spiritual, Christian values-guided restaurant chain Chick-fil-A because, years ago, they promoted a longstanding internal HR executive to oversee diversity and equal opportunity.
Despite positioning themselves as reverent guardians of free markets against government and social overreach, many anti-wokester jokesters seem to have forgotten the most basic requirement of capitalism: to make a profit. Ironically, the free market delivers the most condemning verdict of all. The favorite “woke” targets of anti-ESG activists continue to soar to record economic heights, effortlessly shrugging off anti-woke attacks.
Clearly, despite all the hype and drama, there is little financial threat to mainstream business posed by the anti-woke economy. It’s not a genuine parallel economy–these are scattered cases of ideological grifters and struggling entrepreneurs. Their real talent seems to lie in fast-talking media platforms into giving them an undeserved platform to unfairly target iconic pillars of U.S. enterprise. But as these anti-wokester jokesters struggle to gain financial traction, the numbers will continue to disprove their claims.
Jeffrey Sonnenfeld is the Lester Crown Professor in Management Practice and Senior Associate Dean at Yale School of Management.
Steven Tian is the director of research at the Yale Chief Executive Leadership Institute.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
